Tag: bonds

What They Didn’t Tell You on the Saudi Road Show

The Saudis have just completed peddling their new $15bn bond issue (with more to come). One thing that’s been swept under the rug is a smoking gun. A smoking gun because it’s an indication of just how much trouble the Kingdom is in.

The most telling sign of the depth of the Saudi welfare state’s troubles is the fact that they switched from the lunar-based, religious Hijri calendar to the western Gregorian calendar on October 1, 2016. The reason for this radical change is simple economics.

The Gregorian calendar has 10.9 more days than the Hijri calendar, meaning that the public sector can cut costs through the dilution of wages—same pay spread over more working days. In another move that touches on sensitive religious matters, the Kingdom has announced that it will increase visa charges for people completing their religious pilgrimage, the Hajj. Even in the Kingdom of Saudi Arabia, economics has trumped religion.

Bondholders Should Think Twice about Argentina’s Debt Swap Offer

The video below shows interim-Argentine president Adolfo Rodríguez Saá (he was president for a week) announcing before Congress in late December 2001 that Argentina would default on its debt—the largest sovereign default in history. Rodríguez was interrupted by a standing ovation and chants of “Argentina! Argentina!”


Fast forward 10 years to May 2012 when Argentina’s congress voted overwhelmingly to seize (without compensation so far) Yacimientos Petrolíferos Fiscales (YPF), the country’s largest oil company whose controlling stake belonged to Spain’s Repsol. When the 207-32 vote was announced, the chamber erupted in a wild celebration, with deputies hugging each other and singing:


This is just a taste of Argentina’s flimsy rule of law.